A Middlesex County man today admitted in federal court that he helped run a phony home-foreclosure rescue scheme that included taking out $4.4 million in bogus mortgage loans, authorities said. Associated Press file photo

A Middlesex County man admitted in federal court today that he helped run a phony home-foreclosure rescue scheme that included taking out $4.4 million in bogus mortgage loans, authorities said.

The scheme perpetrated by Frederick "Freddie" Grippo and a co-conspirator resulted in homeowners losing their properties and financial institutions losing money, even as the defendants pocketed a portion of the illegal proceeds, authorities said.

Homeowners who fell victim had properties throughout the region, including Monroe, Rutherford and Brooklyn, authorities said.

Grippo, 32, of Old Bridge, pleaded guilty to one count of conspiracy to commit wire fraud. He faces up to 30 years in prison and a maximum fine of $1 million when he is sentenced March 6.

A spokesman for U.S. Attorney Paul Fishman said the office would not comment on whether the co-conspirator — referred to as "V.G." in court documents — is being charged in the alleged fraud.

The office of state Attorney General Jeffrey Chiesa announced in late September that Grippo and his father, Vito Grippo, 57, were charged in state court with promising to help homeowners facing foreclosure, only to sell the properties to unwitting investors and filing for $4.5 million in fake mortgage applications.

Chiesa’s office also said the scheme was run through Morgan Financial Equity Shares, a company allegedly operated by Vito Grippo. According to Chiesa’s office, the elder Grippo, of Jackson, would persuade struggling homeowners to transfer their deeds temporarily to his business in exchange for financial relief.

Frederick Grippo’s attorney could not be reached for comment today.

According to federal authorities, "V.G." was president of Homdel-based Morgan Financial Equity Shares between January 2008 and February 2010.

Morgan Financial, federal authorities said, ran an Equity Share Program that created a limited liability company in the name of a homeowner’s house, such that the homeowner supposedly retained a 90 percent interest in the property while one or two private investors controlled the rest.

But in reality, authorities said, the so-called investors invested nothing and were only straw buyers. Frederick Grippo and his associates would then fill out falsified mortgage applications in the names of the phony investors for the purchase of the distressed properties.

At the same time, authorities said, the homeowners would attend a closing at Morgan Financial at which they would be given a stack of documents to sign that they thought would prevent foreclosure. However, the documents actually transferred title to the investor, authorities said.

Next, the loan would be submitted to Worldwide Financial Resources, a company at which Frederick Grippo was a loan officer and he would make sure the loan was approved, authorities said.

Once the approved loan money was wired to the settlement agent for a transaction, authorities said, "V.G." would direct the agent to forward a portion of the loan to bank accounts "V.G." controlled.

The mortgage-fraud scheme succeeded in obtaining $4.4 million in loans, authorities said.